Gas is the fee paid to process a transaction or run a smart contract on Ethereum, compensating the network for the computing resources a transaction consumes. Every action on Ethereum, from a simple transfer to a complex DeFi trade, costs some amount of gas, part of how \[pillar hyperlink: What Is Ethereum\] actually functions day to day.
Gas units
Gas measures the computational work a transaction requires. Simple transfers use relatively little gas; complex smart contract interactions use more. The gas amount reflects complexity, not the dollar value being transferred.
Gwei
Gas prices are typically quoted in gwei, a tiny fraction of ETH. The total fee for a transaction equals the gas used multiplied by the gas price you're willing to pay per unit, in gwei.
Why fees spike
Gas prices rise when many people are trying to transact at once and network capacity is limited, since users effectively bid for inclusion in the next block. High-demand periods, like a popular NFT launch, can push fees sharply higher.
Saving on fees
Options include timing transactions during lower-demand periods, adjusting gas settings carefully, and using Ethereum Layer 2s Explained networks, which handle transactions more cheaply before settling back to Ethereum's base layer.